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Hot political money: A snail-paced journey towards part...

South Africa


Hot political money: A snail-paced journey towards party-funding transparency

A close-up view of three wads of folded over stacks of south african banknotes each bound infomally by a rubber band on an isolated studio background

If word from the Presidency holds true, the 2018 Political Party Funding Act will be operational by April 2021, ending a saga of political shifting sands, cold-shouldering Parliament and box-ticking governance.

Corruption Watch wrote to the Presidency on 3 December 2020 urging the setting of a starting date for the Political Party Funding Act before 1 April 2021, in time for the local government elections. Otherwise, the transparency lobby group would go to court for an interdict to compel commencement.

Corruption Watch welcomes the response from the Presidency at the end of 2020 confirming that, following consultations between the Department of Home Affairs and the Independent Electoral Commission (IEC), the Act will be proclaimed on or before 1 April 2021,” it said on 9 January.

However, no further details could be obtained from the Presidency and a call to Home Affairs (the IEC falls into this portfolio) also failed to yield clarity. But the IEC confirmed it had done all that’s needed – from regulations to training and an online private donation declaration system. “The regulations cover all areas of pperation of the ACt… The announcement of the proclamation (commencement) date remains the prerogative of the president,” said IEC Chief Executive: Poltical Party Funding George Mahlangu in a written comment on Thursday.

“We got that response and we will check it will get done. It seemed to me they wouldn’t [delay] unless there is some real rearguard action against it,” Corruption Watch executive director David Lewis told Daily Maverick, adding it was unclear whether delays were due to opposition or “government inertia”.

Will voters in South Africa’s 2021 local government elections, pencilled in for between 4 August and 1 November, know the private donors who fund their political party of choice by the time they cast their ballot?

That’s uncertain, and a little like calculating an out-of-shape favourite soccer team’s progression chances on the basis of other teams losing or drawing and the number of goals along the way.

In terms of the Act the IEC must report on private political donations annually. This report, together with the Auditor-General’s opinion, must go to the National Assembly at the time IEC submits its annual report. Traditionally, the IEC also tables its Represented Political Parties Fund annual report on the public funding that parties receive from state coffers. 

Usually, annual reports are tabled at the end of September, although this can be done immediately after the end of a financial year. The South African Reserve Bank is a perennially early tabler, usually in July.

Bottom line? 

If President Cyril Ramaphosa gazettes the Political Party Funding Act to take effect from 1 April 2021, the IEC has until 30 September 2022 to table the first private political party funding report in Parliament. 

So, voters in the 2021 local government elections will not know who put money into their preferred political party – potentially with a view to extending certain influences – before they cast their ballots.

If Ramaphosa gazettes the Act into full operation, say from 30 March or 2 February 2021, then the IEC has until 30 September 2020 to file its political donations report.

Depending on the date of the local elections, particularly if they are in October, voters may just find out who funds whom.

Much is at stake, which could explain the delays since the legislation was passed by Parliament in late June 2018 and signed into law by Ramaphosa in January 2019.

Importantly, the Act is not only about the money, but also its uses. So, promoting citizens’ participation in political life, ensuring links between people and organs of state and political education are okay, but not, for example, paying anyone a salary, a fee or a reward or “defraying legal costs relating to internal political party disputes”.

Crucially, the ANC has stepped back on private political donations transparency. 

Having initiated the party-funding legislation in 2017 to deliver ahead of the May 2019 elections on ANC conference resolutions going back to the 2007 Polokwane gathering, by late 2020 it had changed its mind. In early October 2020, ANC Treasurer-General Paul Mashatile told the Sunday Times amendments were needed, particularly regarding the need to disclose, as the Act requires, all donations in cash or kind over R100,000, whether in one payment or several. 

The timing of this was curious.

Just days earlier tender tycoon Edwin Sodi told the Zondo Commission how he supported individual ANC politicians and the party.

“I don’t think there is any crime in one supporting a party of his choice. The fact that a lot of the work I get is from the government, I find that a bit overreaching to create the link to my donations to the ANC and the work that we get,” he said. 

Sodi was subsequently arrested and appeared in court for corruption and fraud in the Free State asbestos saga, for which ANC Secretary-General Ace Magashule was also charged and appeared in court on 13 November.  

The Political Party Funding Act and its draft regulations – the IEC in 2019 held public hearings for those – are available on its website. On 12 November 2020, during his Q&A in the House Ramaphosa confirmed a sudden need for amendments – and contestation.

“There are quite a few amendments that are being discussed and thought of before the regulations are fully signed. Now, this has come from a number of quarters and I have been advised to hold back because there are quite a few amendments that are being thought of and being worked on, including from Home Affairs itself,” he said. 

“So, much as I have signed, I stand ready to sign once again, once all those processes have been completed. It is not an attempt to seek to stop this process. It is an attempt to try and do it as correctly as possible.”

It’s not the first time legislation has been caught in tussling interests, leading effectively to cold-shouldering Parliament, the lawmaking sphere of state, as others get their ducks in a row.

Similarly affected was the 2013 Spatial Planning and Land Use Management Act (Spluma), aimed at unifying and harmonising special planning and land use. While activists, despite reservations, described it as a step towards spatial social justice, traditional leaders opposed it as an incursion on their powers and those of traditional councils.

Parliament passed that legislation in 2013 and the president signed it into law on 5 August that year. Then, nothing happened for more than 22 months. That’s because Spluma, like the Political Party Funding Act, had a commencement clause saying it “comes into operation on a date fixed by the President by proclamation in the Gazette”.   

During the Zuma administration traditional leaders had clout. It was only on 27 May 2015 that a presidential proclamation finally announced the full commencement of Spluma from 1 July that year. 

Such a commencement clause is not standard legislative practice. Generally, when the president signs a bill into law it comes into effect from the day it’s signed, even if the Government Gazette is published a day or two later. 

If land-use rights and spatial development is a pickle, private party political funding is even more so. And it is one of the rare issues that have the ANC and DA, and others, singing from the same hymn sheet. 

In an election year much is at stake, and campaigning is in full swing, even if not yet in the public eye owing to lockdown.

The DA – on its website under “Invest in Campaign 2021” – allows for online donations and registering a monthly debit, although it also provides for offline donations. Call to chat, it says.

DA federal finance chairperson Dion George declined to provide fundraising and electioneering details when asked on Wednesday. “Yes, we have a budget and fundraising target and prefer not to share it. No, we don’t disclose our donations,” he said in text messages.

The ANC maintained radio silence on the same questions. Mashatile did not respond to text messages or calls. ANC national spokesperson Pule Mabe did not answer his phone on Wednesday.

However, it seems the ANC is creative around campaigning. After Ramaphosa announced a return to a harsher lockdown on 28 December 2020, Deputy Secretary-General Jessie Duarte told eNCA about the governing party’s Covid-19 messaging campaign: 

“We’ve asked each of our branches, which are ward based, to have a programme within the branch to ensure every household has a message and… if it is at all possible, to visit households. But to only be visited by people who have tested negative for Covid-19. We don’t want to be spreading the virus ourselves,” said Duarte, later adding: “It won’t be a rah, rah, rah, in-your-face campaign, but it will be a campaign.”

Opportune timing for a bit of electioneering.

The public funding of political parties through the IEC’s fund (in 2018/19 the ANC got R88.3-million, the DA R32.2-million and the EFF R2.17-million) is nowhere near what is spent. 

For the last municipal poll in 2016 the ANC spent anything from the authorised R380-million – according to a South African Communist Party document – to the R1-billion the party’s campaigns and elections head, Nomvula Mokonyane, claimed publicly on the campaign trail. It’s understood the DA spent about R350-million on the 2016 local government campaign trail.

Those numbers, and the wholesale reluctance to officially confirm or deny them, highlight the importance of private donation in South African politics. 

The Political Party Funding Act, as intended by Parliament, must be activated now, if the Ramaphosa administration is interested in fighting corruption and the potential for malfeasance, not just talking about it.

Update Note:
On Friday 22 January 2021 President Cyril Ramaphosa gazetted that the Act would come into full operation on 1 April 2021.

“The commencement of the Political Party Funding Act on 1 April 2021 is part of the commitment of this administration to improving transparency and accountability in government,” the Presidency said in Friday’s statement. DM


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